Thursday, November 29, 2012

Metal Working - Cost Reduction Opportunities


Complementarity and Cost Reduction - 1997 paper on Automobile Industry

Cost Effective Machining of Brass, Copper and Its Alloys

Cost Reduction of a Chassis and Cover by switching to Die Casting - Alexander Machine and Tool Company Cases - Cost reduction to $210 per piece frm $300

Emerging Titanium Cost Reduction Technologies

Impression Die Casting Projects - Cost Reduction Achievements - There is crank shaft case also.

Metal Injection Molding - Cost Reduction opportunities for small components with more than 10,000 parts per month and above

Ready for Six Sigma - 2006

Reduction in machining cost of crank shaft die by using a different tool

Setup Time Reduction in Machine Shop

Shell Molding Process produces cost savings

Single piece design instead of 5 items - Forging

The Cost of Machine Tool Ownership

Tips on designing for cost effective machines parts

Use  Cold forming in place of machine - Reduce cost

Use continuous casting instead of machining

Use hard turning instead of grinding - Feb 2003


5-axis machining will reduce fixture costs and setup costs

Latest Trends in Machining - Full Book - Drishtikon Book


Machining cost reduction - Google Search Results

Operating A CNC Powered Machine Shop: Roadmap for Efficiency
http://home.earthlink.net/~cadcamcnc/data/Operating%20A%20CNC%20Powered%20Machine%20Shop.pdf

Wednesday, November 28, 2012

Payback Period - Estimation of Cash Flows and Determination of Payback Period





Payback Period

Payback period is an investment appraisal metric. This period will indicate the number of years it will take to get back the cash initially invested in a project. The period is calculated using the estimated cash flows, both outflows and inflows.

Cashflow Estimation - Some Principles

Cash flows of a project have to be estimated for a time horizon. The time horizon is the minimum of physical life of the plant, technological life of the plant, or the product market life.

In estimating the cash flows of a project, incremental principles (that considers all incidental effects), separation of investment and financing principle, post-tax principle and consistency principles are employed.

Incremental principle

In an existing company, the cash flows are to be estimated by evaluating the cash flows of the company with the project and without the project. The difference will be incremental cash flows related to the project.

Separation of investment and financing principle

In a standard capital expenditure analysis, interest payment to be made on borrowings is not brought into the picture. Borrowing is considered a financing decision and its impact is included in the cost of capital estimation. Hence cash flow estimates do not have any interest payment of component.

Post-tax principle

Tax impact on the cash flow is considered and after tax cash flows are estimated.

Consistency principle

The inflation expectation built into estimation of revenues and costs and cost of capital have to be consistent or same.

___________________________________________________________________________________________

Some Examples Issues That I came Across Recently

1. Acquisition of a software by a design department.
2. Replacement of boiler tubes.
3. Replacement of an electronic equipment as some cards used in the equipment are not available anymore for replacement (the equipment manufacturer is not supplying those cards anymore as the equipment is phased out for production).

The approval authority for the expenditures wants the concenred departments to calculate the payback period for the expenditure proposals.

Originally Knol 1952

Estimation of Cash Flows for Engineering Economic Analysis



An investment proposal or an expenditure proposal must have estimated benefits and costs for doing engineering economic analysis. For simple proposals, the engineer making the proposal may be able to make these estimates. For complex proposals, involvement of marketing, production, maintenance and other operating departments and accounting department may be necessary. The estimation of benefits and costs are to be made keeping in mind the following principles.


Cash flow Estimation - Basic Principles

Time horizon

Cash flows of a project have to be estimated for a time horizon. The time horizon is the minimum of physical life of the plant, technological life of the plant, or the product market life.

Cash flow principle

In economic analysis, it is actual cash flow that is used. So the time at which actual cash is received or paid is to be estimated along with the amount of cash flow.



In estimating the cash flows of a project, incremental principle (that considers all incidental effects), separation of investment and financing principle, post-tax principle and consistency principles are employed.

Incremental principle

In an existing company, the cash flows are to be estimated by evaluating the cash flows of the company with the project and without the project. The difference will be incremental cash flows related to the project.


Long-term funds principle

The cash flows reflect the benefits that accrue to long-term funds.

Interest exclusion principle - Separation of investment and financing principle

In a standard capital expenditure analysis, interest payment to be made on borrowings is not brought into the picture. Borrowing is considered a financing decision and its impact is included in the cost of capital estimation. Hence cash flow estimates do not have any interest payment  component (interest paid for long term funds).

Post-tax principle

Tax impact on the cash flow is considered and after tax cash flows are estimated.

Consistency principle

The inflation expectation built into estimation of revenues and costs and cost of capital have to be consistent or same.


Thus, in estimating the cash flows of a project, incremental principle (that considers all incidental effects), separation of investment and financing principle, post-tax principle and consistency principles are employed.

Friday, November 23, 2012

Opportunity to increase manufacturing resource productivity - McKinsey Article



June 2012


Stephan Mohr,  an associate principal in McKinsey’s Munich office, Ken Somers,  a consultant in the Antwerp office, Steven Swartz,  a principal in the Chicago office, and Helga Vanthournout, s a consultant in the Geneva office jointly authored an article published in McKinsey Quarterly, 2012 June on the theme Manufacturing Resource Productivity.

They observed that cost of inputs especially raw materials and energy are going up as production and consumption of manufactured goods is going up in emerging countries. Therefore variable cost is going up as a proportion of production expenses.

But companies have a visible opportunity of reducing these variable costs. Companies who make use of these opportunities will have operational stability compared to organization who ignore them and hence likely to suffer volatility.

The opportunities are in four areas: Production process redesign, Product redesign, Value recovery from used products that are with consumers, and Supply circle management.

Processes can be redesigned to save 20 to 30% energy.

Product redesign can be undertaken to reduce material use by 30%. At the same time design changes can be brought in to their potential for recycling and reuse.

The benefit can go up to 50% if the mechanism and recycling and reuse are put in place with bringing consumers into the loop to recover used products from them.

Once a company is successful with these initiatives, it can implement them in its supply partner organizations.

Read the full article
http://www.mckinseyquarterly.com/Manufacturing_resource__productivity_2982

Origins of Industrial Engineering



Even though Frederick Taylor is called the father of industrial engineering, there are scholars who identified the need for efficiency and productivity in engineering activity or manufacturing activity and even developed some principles.

Adam Smith in his book Wealth of Nations right in the first chapter discussed productivity of labor.


On the economy of machinery and manufactures - Charles Babbage , 1832
http://books.google.co.in/books?id=cTNVAAAAMAAJ

The Philosophy of Manufactures: Or an Exposition of the Scientific, Moral,  and Commercial Economy
Published 1835
Andrew Ure, Glasgow, Great Britain
http://archive.org/stream/philosophymanuf01uregoog#page/n5/mode/2up


John Stuart Mill Economics

On What depends the degree of productiveness of productive agents
http://ebooks.adelaide.edu.au/m/mill/john_stuart/m645p/book1.7.html#book1.7

Of Production on a large, and production on a small scale
http://ebooks.adelaide.edu.au/m/mill/john_stuart/m645p/book1.9.html

Saturday, November 3, 2012

Work Station Design - Introduction




The Design of Workstations

In any work setting, whether blue-collar or white-collar, a well-designed workstation contributes to productivity and the quality of the products and takes care of  the health and well-being of the workers,  Conversely, the poorly designed workstation will result in low productivity, quality problems and  is likely to cause or contribute to the development of health complaints or chronic occupational diseases.

Industrial engineers with the objective of designing integrated systems of machines, material and men have to take the activity of work systems design as fundamental activity and should not leave it to   production engineers, supervisors and managers who will be aware of the theories and principles related to integrated approach to workstation design. 

There is an international trend with respect to industrial work to simultaneously achieve cost, quality, productivity, delivery precision along with safety and health of workers. Thus, the environment is conducive for systems design that integrates multiple perspectives.

The quality of the end result of the work station design process relies on engineering knowledge that assures productivity, cost and quality and human effort design knowledge that converts ergonomic knowledge into work station engineering solutions.

Design considerations

Workstations are meant for work. It must be recognized that the point of departure in the workstation design process is that a certain production goal has to be achieved. The designer of production equipment -often a specialist in the relevant production engineering and related equipment design develops a vision of the workplace, and starts to implement that vision. The design process is iterative: from a rough first attempt, the solutions become gradually more and more refined. It is essential that wherever possible, human effort engineering aspects be taken into account in each iteration as the work progresses.

It should be noted that human effort design of workstations is closely related to  assessment of workstations from human effort engineering point of view. The assessment structure to be followed will be similar to the cases where the workstation or equipment already exists.

In the design process, there is a need for a structure which ensures that all relevant aspects be considered. The traditional way to handle this is to use checklists containing a series of those variables which should be taken into account. However, general purpose checklists tend to be voluminous and difficult to use, since in a particular design situation only a fraction of the checklist may be relevant. Furthermore, in a practical design situation, some variables stand out as being more important than others. A methodology to consider these factors jointly in a design situation is required. Such a methodology will be proposed in this article.

Recommendations for workstation design must be based on a relevant set of demands. It should be noted that it is in general not enough to take into account threshold limit values for individual variables. A recognized combined goal of productivity and conservation of health makes it necessary to be more ambitious than in a traditional design situation. In particular, the question of musculoskeletal complaints is a major aspect in many industrial situations, although this category of problems is by no means limited to the industrial environment.

A Workstation Design Process

Steps in the process

In the workstation design and implementation process, there is always an initial need to inform users and to organize the project so as to allow for full user participation and in order to increase the chance of full employee acceptance of the final result. A treatment of this goal is not within the scope of the present treatise, which concentrates on the problem of arriving at an optimal solution for the physical design of the workstation, but the design process nonetheless allows the integration of such a goal. In this process, the following steps should always be considered:

1. collection of user-specified demands
2. prioritizing of demands
3. transfer of demands into (a) technical specifications and (b) specifications in user terms
4. iterative development of the workstation’s physical layout
5. physical implementation
6. trial period of production
7. full production
8. evaluation and identification of  problems.



Collection of user-specified demands

It is essential to identify the user of the workplace as any member of the production organization who may be able to contribute qualified views on its design. Users may include, for instance, the workers, the supervisors, the production planners and production engineers, as well as the safety steward. Experience shows clearly that these actors all have their unique knowledge which should be made use of in the process.

The collection of the user-specified demands should meet a number of criteria:

1.   Openness. There should be no filter applied in the initial stage of the process. All points of view should be noted without voiced criticism.
2.   Non-discrimination. Viewpoints from every category should be treated equally at this stage of the process. Special consideration should be given to the fact that some persons may be more outspoken than others, and that there is a risk that they may silence some of the other actors.
3.  Development through dialogue. There should be an opportunity to adjust and develop the demands through a dialogue between participants of different backgrounds. Prioritizing should be addressed as part of the process.
4.   Versatility. The process of collection of user-specified demands should be reasonably economical and not require the involvement of specialist consultants or extensive time demands on the part of the participants.

The above set of criteria may be met by using a methodology based on quality function deployment (QFD) according to Sullivan (1986). Here, the user demands may be collected in a session where a mixed group of actors (not more than eight to ten people) is present. All participants are given a pad of removable self-sticking notes. They are asked to write down all workplace demands which they find relevant, each one on a separate slip of paper. Aspects relating to work environment and safety, productivity and quality should be covered. This activity may continue for as long as found necessary, typically ten to fifteen minutes. After this session, one after the other of the participants is asked to read out his or her demands and to stick the notes on a board in the room where everyone in the group can see them. The demands are grouped into natural categories such as lighting, lifting aids, production equipment, reaching requirements and flexibility demands. After the completion of the round, the group is given the opportunity to discuss and to comment on the set of demands, one category at a time, with respect to relevance and priority.

The set of user-specified demands collected in a process such as the one described in the above forms one of the bases for the development of the demand specification. Additional information in the process may be produced by other categories of actors, for example, product designers, quality engineers, or economists; however, it is vital to realize the potential contribution that the users can make in this context.

Prioritizing and demand specification

With respect to the specification process, it is essential that the different types of demands be given consideration according to their respective importance; otherwise, all aspects that have been taken into account will have to be considered in parallel, which may tend to make the design situation complex and difficult to handle. This is why checklists, which need to be elaborate if they are to serve the purpose, tend to be difficult to manage in a particular design situation.

It may be difficult to devise a priority scheme which serves all types of workstations equally well. However, on the assumption that manual handling of materials, tools or products is an essential aspect of the work to be carried out in the workstation, there is a high probability that aspects associated with musculoskeletal load will be at the top of the priority list. The validity of this assumption may be checked in the user demand collection stage of the process. Relevant user demands may be, for instance, associated with muscular strain and fatigue, reaching, seeing, or ease of manipulation.

It is essential to realize that it may not be possible to transform all user-specified demands into technical demand specifications. Although such demands may relate to more subtle aspects such as comfort, they may nevertheless be of high relevance and should be considered in the process.

Principles of Motion Economy Considerations

Principles of Ease of Access and Safety Considerations

Ergonomic Considerations - Principles of Occupational Health and Comfort Considerations

Engineering Considerations



Ergonomic Considerations - Musculoskeletal load variables

In line with the above reasoning, we shall here apply the view that there is a set of basic ergonomic variables relating to musculoskeletal load which need to be taken into account as a priority in the design process, in order to eliminate the risk of work-related musculosketal disorders (WRMDs). This type of disorder is a pain syndrome, localized in the musculoskeletal system, which develops over long periods of time as a result of repeated stresses on a particular body part (Putz-Anderson 1988). The essential variables are (e.g., Corlett 1988):

· muscular force demand
· working posture demand
· time demand.

With respect to muscular force, criteria setting may be based on a combination of biomechanical, physiological and psychological factors. This is a variable that is operationalized through measurement of output force demands, in terms of handled mass or required force for, say, the operation of handles. Also, peak loads in connection with highly dynamic work may have to be taken into account.

Working posture demands may be evaluated by mapping (a) situations where the joint structures are stretched beyond the natural range of movement, and (b) certain particularly awkward situations, such as kneeling, twisting, or stooped postures, or work with the hand held above shoulder level.

Time demands may be evaluated on the basis of mapping (a) short-cycle, repetitive work, and (b) static work. It should be noted that static work evaluation may not exclusively concern maintaining a working posture or producing a constant output force over lengthy periods of time; from the point of view of the stabilizing muscles, particularly in the shoulder joint, seemingly dynamic work may have a static character. It may thus be necessary to consider lengthy periods of joint mobilization.

The acceptability of a situation is of course based in practice on the demands on the part of the body that is under the highest strain.

It is important to note that these variables should not be considered one at a time but jointly. For instance, high force demands may be acceptable if they occur only occasionally; lifting the arm above shoulder level once in a while is not normally a risk factor. But combinations among such basic variables must be considered. This tends to make criteria setting difficult and involved.

In the Revised NIOSH equation for the design and evaluation of manual handling tasks (Waters et al. 1993), this problem is addressed by devising an equation for recommended weight limits which takes into account the following mediating factors: horizontal distance, vertical lifting height, lifting asymmetry, handle coupling and lifting frequency. In this way, the 23-kilogram acceptable load limit based on biomechanical, physiological and psychological criteria under ideal conditions, may be modified substantially upon taking into account the specifics of the working situation. The NIOSH equation provides a base for evaluation of work and workplaces involving lifting tasks. However, there are severe limitations as to the usability of the NIOSH equation: for instance, only two-handed lifts may be analysed; scientific evidence for analysis of one-handed lifts is still inconclusive. This illustrates the problem of applying scientific evidence exclusively as a basis for work and workplace design: in practice, scientific evidence must be merged with educated views of persons who have direct or indirect experience of the type of work considered.

Adoptation of  http://www.ilo.org/safework_bookshelf/english?content&nd=857170342

Bibliography

Ergonomic Recommendations for Workstation Design - Liberty Mutual Insurance Company-2004
Search on Google for the paper.
http://www.libertymutualgroup.com/omapps/ContentServer?pagename=LMGroup/Views/LMG&ft=5&fid=1138365473784&ln=en  has the references of many papers on worksystems design and one can request for 5 reprints from the list.

Ergonomic Assessment of Workstation Design in Automotive Industry
2010 - UMP Malaysia paper
http://umpir.ump.edu.my/1804/1/Ergonomics_Assessment_Of_Workstation_Design_In_Automotive_Industry.pdf

Mobile workstations and Mobile workstation carts
http://ehstoday.com/health/ergonomics/ehs_imp_36654

Office Computer Workstation Design - Ergotron
http://www.ergotron.com/portals/0/literature/whitepapers/english/ergonomic_factors.pdf

Industrial Ergonomics: A Systematic Ergonomics Approach
Biman Das and Arjit K Sengupta
Applied Ergonomics, vol 127, no.3, Pp. 157-163
Summarized by Shenbaga Murty, PGDIE 2012-14